Summary of the report

The research underlying the report was undertaken to look for ways to support these students in their business goals, as a means of addressing two concerns common across rural and regional Australia: that young people leave regional areas to look for work, education and business experience; and that the rate of business formation in regional areas seems well below that for metropolitan areas. The research started from a perception that encouraging school-aged people with an interest in business to pursue their business goals might be able to have an impact on both these concerns.

In looking closely at this group for the first time, this publication provides information to help education authorities, schools and communities to support their young business operators, helping their businesses grow and providing these students with stronger motivations to stay and build their local economies.

Aims and objectives
This research project sought to provide vital information about young people with business aspirations and their development support needs. The project aimed to analyse this information to identify ways of enhancing the business skills of young people, while at school, thereby increasing their communities’ economic, business and employment opportunities. It also aimed to help stimulate debate within the education sector and among other stakeholders with interest in this area.

Background
The Business Operators Still at School (BOSS) project grew out of a premise that the development of entrepreneurial skills is central to the sustainability of industries and to the development of new and innovative businesses and business processes, in particular in rural and regional communities around Australia. The research stemmed from a belief that development of these skills at an early age may increase the number of new start businesses in Australia and at the same time increase efficiencies and decrease small business closure and failure rates.

Many communities in rural and regional Australia are concerned about young people leaving them for the cities once they finish school. There are also often concerns in these areas about the need for new businesses to start and to prosper, given that the number of small businesses in regional areas grew much more slowly from 1995-96 to 1999-2000 than in city areas—by just 0.9 percent compared with over 13 percent in metropolitan areas. This project sought to address both these underlying concerns, by researching the characteristics, needs and aspirations of school students who are operating their own businesses.

There are currently a range of business simulation programs and activities that are available for schools to use in preparing young people for the business world. These activities provide excellent simulations in management and business activity and assist in developing enterprising behaviour and an improved understanding of business needs. But it seems there is a gap, in the absence of individual and professional support for the young person who has already started a business or wants to start their own business.

A broad-based survey carried out in 2000 estimated that 68% of Australian 15 to 24 years old would like to run a business, while 6% of 15 to 19 year olds had already run a business. Another survey in 2001 estimated that 4% of 15 to 24 year olds in Australia were already running businesses. Based on a conservative estimate that 4% of school students are running a business, there are likely to be up to 53 000 Australian students running businesses while they are still at school.

This project addresses a missing piece of the jigsaw in the education of Australia’s young people— education specially tailored for the next generation of business owners.

Methodology
This research project was funded by RIRDC and carried out in 2004. The project involved contact with over 400 teachers and schools and comprised:

• A literature review;
• A national online survey of school students—including those from rural and regional areas— which gathered responses from over 200 students in three broad types:
1. Those already running their own business;
2. Those intending to run a business;
3. Those simulating a business through an enterprise education activity; and

• A series of four focus groups involving a total of 60 students.

The findings from the primary and secondary research activities were analysed and compiled into this report.

Findings
The project made contact with many school students who are either already running a business, or who would like to. The project found that businesses run by students are hard to define and that the school system is not connected in any formal way with business operators as a group, and does not see running a business as a recognised outcome for students. The project found that business operators at school have strong similarities with their adult counterparts and have particular support needs, and that schools therefore have a challenging role in supporting students running businesses.

In contacting schools, the project found that the school system does not seem well-placed to understand the needs of business owners and their particular communication requirements, the school system is not connected in any formal way with business operators as a group, and does not see running a business as a recognised outcome for students.

Six main findings have emerged from the research:

1. School-aged young people have strong interest in being in business
2. Many students are wanting to start their own business
3. School students run businesses—but the notion of ‘business’ may be hard to define
4. Business operators at school have strong similarities with their adult counterparts
5. Business operators at school have particular support needs
6. Schools have a challenging role in supporting students running businesses.

The businesses run by student respondents to the surveys carried out through this project were generally of small scale, but were in a variety of industries and were valued by their owners—with just 28% of these students wanting to swap their business for a good job.

On questions on attitudes to business, the barriers to growth, business skills needs and approaches to meeting those needs, the responses by business operators still at school look very similar to responses from adult small business operators. These similarities suggest that the business operators still at school have a good knowledge of what it means to be in business, and may well go on to be small business operators later in life. One focus group of students from farms was unanimous and emphatic in the knowledge that to run a farm is to run a business.

The survey yielded useful information on the support needs of business operators still at school, and showed that they have strong interest in activities to build their business skills. These survey respondents reported:

• They are interested in developing their business skills (73%);
• They do not have all the skills they need (23%); and
• Their top needs are marketing, accessing customers, risk assessment and managing money.

But respondents also told us that they are not sure how, or even if, school could help. One of the focus groups participants said: Business is completely separate from school Another said, Schools can’t really help, I don’t know why we are bothering with this This seems to be partly due to the strongly practical nature of their skills needs, and the perception that school is not able to deliver the kind of informed, practical help they are looking for.

In their emphasis on practicality, business operators still at school are very like their adult counterparts. Recent reviews of the learning needs and learning styles of small business operators in general have found that they require very practical, hands-on training that gives them quick returns on their investments of time and money. This learning style may not be well suited to the classroom.

Existing business related activities in schools are in three areas:

• Business studies curriculum—which focuses on studying aspects of business management from a textbook perspective;
• Enterprise education—which focuses on encouraging students to ‘be enterprising’ in very general sense rather than on developing business operational skills; and
• Extra-curricular exercises like Young Achievement Australia (YAA) and Practice Firms—which are well known tools that help students learn about business from the perspective of the roles and responsibilities of Boards of Management of companies.

While all very well regarded, these activities do not seem to be picking up students who are already running their own business, or giving them the skills they are looking for. For example, only one of the operators of an existing business surveyed had participated in a YAA program, and one focus group participant said of their curriculum: Business studies is about reading books not about out there doing it Respecting these needs, we expect that the training and skills development sought by respondents needs to be delivered in a personal, applied style (by knowledgeable teachers, trainers or mentors) to ensure that each student gets the practical outcomes they are looking for.

Implications
The project identified several models that can assist in developing the skills and the business success of young people while they are at school. These models would need the involvement from the education sector, and a willingness for it to see business ownership and operation as a relevant school outcome.

It is likely to surprise many in the education sector that the project found that there are many students who are already running a business or conducting business-like activity, and that many school students do want to run a business as a career outcome.

The information gathered through this project can be used to guide the creation of support tools or models to effectively respond to the needs of these young people. It could consequently contribute to the long-term sustainability of many regional towns in supporting processes to build their future business capacity.

The similarities this project has identified between adult and school-aged business operators is important, especially when experience has shown that start-up businesses need close personal support to survive and thrive. The school environment may be a perfect place to provide and foster early and long lasting business ownership skills.

Recommendations
The findings from this research project were discussed in a forum which included representatives from some of the main stakeholder organisations: the Australian Government’s Department of Education, Science and Training and its Office of Small Business, and a State Department of Education. The recommendations have been written around the interests of these organisations and have been prepared under three broad headings:

• Case studies – to be prepared nationally to appeal to students and teachers to raise awareness and interest.
• Development and trial of models to support business operators at school – to provide a more active and interventionist approach than case studies.
• Models for the education sector included inclusion of business ownership as a part of VET in Schools activities; modification of current curriculum to include business operations and business start-up as an examinable component; a school that specialises in developing young people into business; and a specialist teacher trained to deliver business support to students from a number schools.
• Models for the community included development of business networks for young people still at school; provision of business support from parents; and provision of business support from ‘business professionals’ like business facilitators, local business groups, or retired business people in a community to mentor and provide business leadership to business operators at school, and to those thinking of starting a business.
• Support materials prepared by education authorities to underpin model trials including curriculum information, class and lesson notes and a list support resources likely to be available at the local level.

We hope that the interest in these concepts that was demonstrated in the discussion forum is indicative of some individuals, or organisations, picking up the recommendations set out above, and acting to recognise and support this unrecognised group of enterprising young people in Australia. We believe that action on these recommendations will be important for the further development of healthy economies, especially in regional areas, healthy local business communities, and improved assistance to young people (and their families) in pursuit of their hopes and dreams.

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Last updated: November 2006
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http://www.rirdc.gov.au/reports/HCC/05-099sum.html